What’s with these kids today???
must be because of tik tok! and tylenol!
One thing i don’t understand is why a company always needs growth. Why not just do what they do, solve a problem for the people or companies they serve, and be happy with that. Growth will come, and plateau when it reaches a natural level of saturation. Why keep trying to expand, sell more, increase profit and eventually collapse?
It’s the Ford vs dodge case that dictated this, instead of investing back into the company or its employees, they were required to provide as much profit to shareholders as they could
because the shareholders want returns on their investments. if you own stock, you want the value of the stock to go up. that requires more profits.
it’s not really an issue for private companies. a lot of private companies/small business don’t grow as long as they provide adequate cash flow to their owners.
it’s a public company issue.
Stocks can also return dividends and the value of a stock is not purely growth or even profit-based.
those companies are typically not in a growth stage. they are established.
Yes. My point was that many publicly traded companies /stocks aren’t growth focused.
it’s a public company issue.
Why do we have them then?
because public companies allow for a much larger access to capital and scale of operations.
private companies can’t grow at the same rate as public companies because they are limited to private investors.
public companies anyone can buy the stock. if you want to grow big and fast, you have to go public.
This is the point though… Our world today has an issue, because it has become dependent on fast and unstoppable growth. Companies don’t have to grow fast and big, and they shouldn’t.
Because growth is required for shareholders to keep funding the company. Shareholders don’t care whether a companies product is “finished”, they need growth. This is the case for public companies anyways, a lot of smaller private companies also try to grow, but they try to do so within reasonable limits, because they aren’t pressured by investors. As long as the company stays afloat, the growth rate doesn’t matter
If the company needs shareholders to fund it though, it is not economically viable in the first place. It is being artificially supported by the capital that they add to it
It’s a bit more complicated than that. One way the shareholders support the company is that the company will hold sone percentage of its shares, which have a value as determined by the stock market. Amongst other things, the company can use those as colateral for loans which they may use to expand the company. The idea being that expansion will make the shares worth more, and increase income, so making the loans easier to pay off. Shareholders support the value of the shares by not selling them cheaply, This benefits the shareholders and the company, and if they think the company is doing well, they’ll tend to trade the shares at a higher price. If they think the company isn’t doing well, fir instance it’s not increasing its valuation, they’ll tend to trade at a lower price, further reducing the valuation, and making it harder for the company to raise funds through loans or share sales.
Basically the whole thing is held up by the common delusion that the share price is related to the performance of the company. It’s actually only related because everyone agrees it is.
ok. so nobody should ever get loans then?
because that’s what shareholding is. a loan.
Nah… i don’t see shareholding as a loan. Loans cost a set percentage rate. Shareholding costs parts of the company worth. Loans are imo totally legitimate. Shareholding on the other hand, is selling off the company to people who don’t care if it survives or not. As long as they jump ship before it shows signs of sinking
One thing i don’t understand is why a company always needs growth.
Promises of growth mean the firm is eligible for more lending at a lower interest rate. Growth implies lower risk of default and higher ROI down the line. So people will risk more money with a lower immediate expectation when they assume the investment will pay off big in the future.
This higher rate is lending can create a self-fulfilling prophecy. If you can borrow cheaper than your competition, you can expand your enterprise faster and move more units sooner. You can consolidate market share and transition towards monopoly status sooner. And that means you can raise your prices with impunity.
Even if you can’t deliver, it’s good to promise growth and then fake it until you make it, in order to access all that cheap borrowed money asap
To me it sounds like companies outgrow themselves in the pursuit of growth
That’s how you end up with the Corporate Dinosaurs. Overlarge corporate conglomerates with C-levels who have fully lost the plot of what the business is intended to do, with vulture capitalists circling overhead to strip them down for parts as soon as they stumble.
One thing i don’t understand is why a company always needs growth.
It doesn’t, but if it’s publicly-owned, shareholders will want a return on their investment, which requires growth, and that creates the pressure to continuously grow.
Because Samsung thinks refrigerators & laundry machines must have tablets & wifi. After that they MUST KEEP GROWING and attach Tesla cars with unopenable doors to their refrigerators & laundry machines. And subscription-based functionality for every basic function.
Growth = shareholder get big dividends and bigger share prices.
Sure, but then the company is not viable without the support of external capital. From my point of view, investors artificially expand the capacity of companies, to the point where they no longer are viable
It’s 100% greed, they don’t care if the company is viable in 6 months as they cash out and move on before the share prices take a hit. The next
investorgambler dose the same or gets stuck with the lossesIt sounds like having public companies is the issue then.
We should burn them all down.
Lol, my mom had to pay like a ¥15000-¥30000 rmb (idk the exact details) fine for my legal identity papers, due to violation of the One Child Policy, and that was a lot of money for my parents. Like… literally got a bill at spawn. My mom keeps talking about this and joked that I have “negative net worth” lol.
“It’s because we lack religions!”
- christian nationalists being brainwashed by right-wing politics
A little unironically. There’s something to be said for a large social network of like minded people who can reinforce one another’s beliefs. One of the appeals of The Prosperity Gospel, for instance, is that you’re following the playbook so life will just… work out. No need to worry, you’ve got this because God’s got you.
Great for climate denialism, too. “God said he wouldn’t flood the planet again. That’s what the rainbow proves.”
It’s often surprising to see what people will go through when they’re convinced it’s all just going to work out for them.
Not just young people.
Yeah a few aware older folks get it.
Many of us are aware, but we have some history and experience behind us to bolster our attitude. Also, young people are more aware of what’s going on where we used to mainly judge things by our local environment.
I thought life was rough as a young man in 90s America! Well, that seemed to be the peak. :(
All the younger people I know don’t give a shit.
I’ve spoken to a lot of older people who have outright said they don’t give a shit because they won’t be around to deal with it
They could just be disassociating. Escapism is very real too, and I know plenty of people around my age that would just rather not think about the issues at hand when they feel that they are completely powerless.
How do you know they don’t?
All they care about is brain rot videos and buying weed.
You realize both of those are coping mechanisms to deal with anxiety and depression, right?
My mom was like… “We can’t afford to buy a home in today’s world”. My parents have had 2 homes in my life and now they are trailer people. I don’t see where they think wealth is going, to the bottom? Or the top 1%? We NEED to cap capitalism in the kneecaps
Of course it’s a coincidence, a lot of articles are beeing written about this complete mystery (spoilers: they think it’s your fault)
Definitely a coincidence. Really an interesting one.
P. S. Sarcasm.
Young people these days! What do they even have to be anxious about? /s
